[ Tuesday, August 23, 2005 ]


New FAQ for You: CMS has published a new FAQ addressing whether a health plan can disclose information to the plan sponsor to allow the plan sponsor to receive the Retiree Drug Subsidy from Medicare, which (I believe) is part of the new "Part D" Medicare prescription drug coverage. The key issue here relates to the fact that the "plan" is separate from the "plan sponsor;" people with employer-sponsored health insurance (i.e., most of us) have a tendency to think that we get our insurance from our employer, and in a way that's true. But technically, our employer sets up an employee benefit plan under ERISA, and that "plan" is who provides the insurance. And because under HIPAA "plans" are covered entities while "employers" aren't, it is important to keep that distinction in mind. Your benefits coordinator works for your company for all intents and purposes, but really works for the "plan," and it is very, very important that the wall of separation exist between the "plan" and the "employer." In fact, one of the primary driving concepts behind the need for medical record privacy was the concern that an employer might get access to an employee's medical information that the employer really had no right to see, simply because of the link between the company as employer and the company as insurance provider. Really, your boss shouldn't know about your trip to the emergency room to deal with an infected body piercing, or some other unfortunate event occurring in your private life. But your boss might be able to find out that embarrasing information if the wall between the insurance plan records and the employment records is breached.

The answer to the FAQ question is that the plan can disclose that information (retiree prescription drug information) to the plan sponsor, since the plan sponsor needs the information to submit to CMS for participation in Part D. However, the plan can only share the information with the plan sponsor if the plan documents have been amended as required in 164.504(f)(2), which requires that the separation between the plan and employer be maintained and the employer specifically agree not to use any information that crosses over for employment related purposes.

For other FAQs, go here.

Jeff [9:50 AM]

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